ADB may take part in financing TAPI

The Asian Development Bank (ADB) may join to finance the construction of the long-delayed Turkmenistan-Afghanistan-Pakistan-India gas pipeline project, said Chin Choon Fong, senior advisor at the Central and West Asia Department of the bank.

The official added that it is not yet finalized what, if any, parts of the project the bank may be involved in.

The ADB has served as the TAPI transaction advisor since 2013 and has provided over USD 4mn in technical assistance for the project’s pre-feasibility studies, risk analysis and mitigation, market analyses, security advices, legal advice, among others.

TAPI is an important linchpin in the realization of the New Silk Road in the arena of energy where Afghanistan again plays a central role in connecting energy-rich Central Asia to energy-deficient South Asia. The idea of the USD 7.6bn (initial estimate of the cost) pipeline first originated in 1995 when the Turkmenistan and Pakistan leaders signed a Memorandum of Understanding (MoU).

The project aims to export up to 33 billion cubic meters (bcm) of natural gas per year through a proposed 1,800-kilomter pipeline from the Dauletabad gas field in Turkmenistan along the highway through Herat, Helmand and Kandahar in Afghanistan, to Quetta and Multan in Pakistan, and on to Fazilka in India. The pipeline could become a recipe for long-term stability in Afghanistan by generating revenue for the Afghan government and creating jobs for Afghans in general.

Envisaged to be completed by 2018, the pipeline is expected to produce USD 400mn a year in revenues for Afghanistan. It will further provide an alternative energy source for Afghanistan, which is currently depending on Iran for fuel. In addition to the economic benefits that the project will bring in its wake to the participating countries, it has serious geopolitical implications as well that will further bolster Afghanistan’s ties with its neighbors, particularly Pakistan. Pakistan and Afghanistan’s tensions over trade and terrorism are profound. The TAPI project will promote positive political and economic interaction between the two neighboring nations by providing an avenue for mutually-beneficial economic cooperation.